Act Locally » February 14, 2011

Belo Monte and Brazil’s ‘Pandora’

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Brazilian officials don't want to be the muscular villains of Avatar.

It’s the biggest forest battle on Earth. The plot: a big government, in this case Brazil–armed to the teeth with unlimited executive and financial powers–takes on a rag tag group of river-dwelling tribes and around 20,000 poor people who happen to be in the way of what might become the world’s largest hydroelectric dam project.

The dam, known as Belo Monte, is to be built along the Xingu River in Brazil’s Wild West state of Pará, a large and relatively desolate state. Most homes have no running water or sewer system. Para happens to be located in a desirable piece of global real estate: the Amazon.

On April 20, 2010, the $9.35 billion project was auctioned off to the lowest bidder, as is custom in Brazil’s highly regulated electric power sector. Norte Energia, a consortium of government-owned power companies and some privately held construction firms, won. Norte Energia needs to spend around $2 billion to meet 40 social and environmental demands before Brazilian environmental licensing agency, IBAMA, grants the all-important installation permit.

The problem is, Norte Energia has met less than 20 of those requirements as of mid-January and needs money to meet the rest. Brazil’s National Development Bank (BNDES) – which lent out $83 billion in 2010, more than the World Bank and Inter-American Development Bank combined–expressed interest in providing the funds. But in early February, shortly after IBAMA granted Norte Energia part of the installation permit to get Belo Monte underway, the company realized it could not meet the BNDES bridge loan requirements. Those requirements were that the company meet all 40 IBAMA obligations, including relocation and payment of people affected by the dam.

“We will lend the money when IBAMA gives them the installation permit,” says Nelson Siffert, infrastructure development director of BNDES. “This project is too important. It has to go forward. IBAMA is being rigorous. We are going to be rigorous, too.”

Without the agency’s support or a BNDES bridge loan, the Belo Monte project is currently on hold–and not for the first time. The massive dam has been in the works since the 1970s and has been stopped by lawsuits from indigenous tribes at least once. Now the dam has a builder, and there is real money on the line.

Brazil wants to remain a hydro-powered, clean energy country. More than 80 percent of the country’s electricity is generated by hydropower, but to keep that source from stagnating as electricity demand picks up, it needs to tap into Amazon’s rivers, where 70 percent of the country’s potential hydropower remains unexplored.

To give an idea of the generation capacity, Brazils biggest dam, the 14,000 megawatt Itaipu, powers 10 percent of the country and nearly all of Paraguay. It was the world’s largest until China completed the controversial 18,200 megawatt Three Gorges Dam in 2008. If the 11,200 megawatt Belo gets going, it will be the largest dam project under construction and become the world’s third largest dam once operational.

Belo Monte, which 52 percent of the country supports, according to Folha de São Paulo, the nation’s largest circulation daily, has caused quite a stir. The project is arguably the sexiest environmental disaster-in-waiting. At least that is what James Cameron and activists seems to think. In March and April 2010, Avatar and Titanic director Cameron visited the Xingu River communities and was moved to create a short anti-Belo Monte documentary called Message from Pandora. A local bishop, Erwin Krautler, was awarded the so-called alternative Nobel Prize, the Right Livelihood Award, in Stockholm in December for his human rights work. He calls Belo Monte “a death sentence.” And on February 8, protesters in Brasilia, the capital, delivered a petition signed by more than 600,000 Brazilians asking the president to cancel the project.

Brazilian officials don’t want to be the muscular villains of Avatar. But when IBAMA gets too rigorous, those in charge seem to pay the price. IBAMA president Abelardo Azevedo stepped down January 12. He was hired in April 2010 to replace Roberto Franco, who also stepped down citing pressures from top cabinet ministers to approve Belo Monte.

“I never allowed myself to get pressured on Belo Monte or any of the Amazon hydroelectric projects,” says Marina Silva. She stepped down as Minister of the Environment in May 2008 over deforestation policy and has become Brazil’s First Lady of the Forest. “The president never pressured me personally. He always said we had to get these dams built, but we had to get these social and environmental problems solved, too. When you look at Belo Monte, nothing is solved,” she says.

There are over nine injunctions from Para state federal prosecutors filed against Belo Monte on various grounds, including questions of legality regarding so called partial permits. But all have been shot down by higher court judges in Brasilia, the capital.

“IBAMA does not make up the rules. We are not giving away partial permits,” says Americo Ribeiro, the agency’s new president. “The Brazilian government does not want Belo Monte to be an embarrassment. Norte Energia received the first step of an installation permit that gives it the rights to prepare the area for laborers. If they fail to meet all 40 of their obligations, like relocating thousands near the dam, they won’t get the permit,” he says, adding they would have to leave the area.

Belo Monte might be painless for most Brazilians, but not for many in Para state, who are hoping they are not displaced by rising waters. “I don’t want to sell this place,” says Ana Plens. She lives on 345 acre farm along the TransAmazona highway, a dirt, jungle-lined road lined with sparse settlements. “This farm was for my children and their children. I don’t know if my heart can handle the day I’m told to start packing. I’m not mentally prepared for that.”

Editor’s note: A shorter version of this story appeared in the March 2011 issue.

A longtime reporter and foreign correspondent for Dow Jones and the Wall Street Journal, Kenneth Rapoza is an In These Times columnist who writes about the news business. His work has also appeared in The American Prospect, The Nation and at Salon.com. He can be reached at ken@inthesetimes.com.

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